Group 1 - Pearl Gray is a proprietary investment fund and independent market research firm focusing on Fixed-Income and Capital Flows [1] - The firm also provides analysis on equity REITs, Investment Fund Appraisal, and Bank Risk Analysis for its Seeking Alpha readers [1] Group 2 - The content published by Pearl Gray is independent analysis and does not constitute financial advice [1][3] - Readers are encouraged to consult a registered financial advisor before making investment decisions [3]

Interest Rate Risk - The company has identified interest rate risk as a primary source of market risk, affecting earnings and asset values [472]. - The Asset-Liability Committee (ALCO) meets quarterly to monitor interest rate risk sensitivity and ensure compliance with risk limits [474]. - The company utilizes two approaches to model interest rate risk: Net Interest Income at Risk (NII at Risk) and Economic Value of Equity (EVE) [479]. Net Interest Income Sensitivity - As of September 30, 2025, the net interest income sensitivity for a +200 basis point shift is projected to increase by $89,216 thousand, representing a 15.8% change [480]. - The company reported a dollar change in net interest income sensitivity of $(85,985) thousand for a -200 basis point shift as of September 30, 2025, reflecting a 15.3% decrease [480]. - The company aims to limit the change in net interest income to 20% for a +/- 100 basis point move in interest rates and 30% for a +/- 200 basis point move [480]. Equity and Tangible Book Value - Total equity as of September 30, 2025, is reported at $2,225,434 thousand, up from $1,939,107 thousand in 2024 [488]. - Tangible common shareholders' equity increased to $1,666,087 thousand in 2025 from $1,481,641 thousand in 2024 [488]. - The tangible book value per common share increased to $36.31 in 2025 from $32.38 in 2024 [488]. Economic Value of Equity - The economic value of equity (EVE) is expected to increase by $48,147 thousand (2.3%) with an immediate -200 basis point shift in interest rates as of September 30, 2025 [485].

Financial Performance - Third quarter 2025 net income was $54.7 million, a decrease of $6.6 million, or 11%, compared to the third quarter of 2024, but an increase of $16.7 million, or 44%, compared to the second quarter of 2025[1][2][4][5] - Diluted earnings per common share for the third quarter 2025 was $0.97, down 17% from $1.17 in the third quarter of 2024, but up 62% from $0.60 in the second quarter of 2025[1][2] - Net income for Q3 2025 was $54,701 thousand, representing a 44% increase from Q2 2025, but an 11% decrease from Q3 2024[50] - Net income for the nine months ended September 30, 2025, was $150,921,000, a decrease of 33% compared to $224,720,000 for the same period in 2024[55] - Total income for the nine months ended September 30, 2025, was $496,160,000, reflecting a 4% increase from $476,963,000 in 2024[55] Asset and Deposit Growth - Total assets reached a record-high of $19.4 billion, increasing by $213.4 million, or 1%, from June 30, 2025, and by $548.9 million, or 3%, from December 31, 2024[1][7] - Total deposits increased by $1.2 billion, or 10%, compared to June 30, 2025, and by $2.0 billion, or 17%, compared to December 31, 2024[1][16] - Total assets as of September 30, 2025, reached $19,354,647 million, up from $19,141,204 million as of June 30, 2025[60] - Total deposits, including all categories, reached $1,393.47 billion, up from $1,268.68 billion, representing a 9.8% increase[67] Loan and Credit Quality - The provision for credit losses decreased by 45%, or $23.8 million, with loans receivable classified as special mention declining by 9% to $155.7 million compared to June 30, 2025[1][9][12] - The allowance for credit losses on loans was $93.3 million, reflecting a 2% increase from June 30, 2025, and an 11% increase from December 31, 2024[1][9] - Total nonperforming loans were $298,268 million as of September 30, 2025, an increase from $251,532 million in the previous quarter[65] - Delinquent loans to total loans ratio was 2.28% as of September 30, 2025, compared to 1.91% in the previous quarter[65] Income and Expense Analysis - Noninterest income rose to $43.0 million, an increase of $26.3 million, or 157%, compared to $16.7 million, driven by significant growth in loan servicing fees and gains on loan sales[1][26] - Total noninterest expense for Q3 2025 was $77,250 thousand, showing a 26% increase from Q3 2024[50] - Noninterest income decreased by 15% to $43,014 thousand from Q2 2025, but increased by 157% compared to Q3 2024[50] - Noninterest income rose by 32% year-over-year to $117,187,000, compared to $88,967,000 in 2024[55] Efficiency and Return Metrics - The efficiency ratio for Q3 2025 was 45.16%, an increase of 200 basis points from Q2 2025 and 416 basis points from Q3 2024[50] - Return on average assets for Q3 2025 was 1.16%, an increase of 36 basis points from Q2 2025, but a decrease of 18 basis points from Q3 2024[50] - Return on average tangible common shareholders' equity decreased by 1,006 basis points to 9.33% compared to 19.39% in the previous year[55] Strategic Initiatives and Future Outlook - The company plans to expand its market presence through strategic acquisitions and new product offerings in the upcoming quarters[67] - Future guidance indicates a focus on enhancing user data analytics to drive customer engagement and retention[67] - The company is investing in new technologies to improve operational efficiency and customer service capabilities[67]

Financial Performance - Total equity increased to $2,184,632,000 as of June 30, 2025, compared to $1,888,147,000 in 2024, reflecting a growth of 15.7%[485] - Tangible common shareholders' equity rose to $1,625,279,000 from $1,430,652,000, marking an increase of 13.6% year-over-year[485] - The company's assets grew to $19,141,204,000 in 2025, up from $18,212,422,000 in 2024, representing a 5.1% increase[485] - The tangible book value per common share increased to $35.42 in 2025, compared to $31.27 in 2024, indicating a growth of 13.8%[485] Interest Rate Risk Management - Net interest income sensitivity for a +200 basis point shift is projected to increase by $85,982,000, a 16.2% change[478] - Economic Value of Equity (EVE) sensitivity shows a potential increase of $54,849,000 for a -200 basis point shift, reflecting a 2.6% change[480] - The company aims to limit changes in net interest income to 20% for a +/- 100 basis point move in interest rates[478] - Interest rate risk management is actively monitored by the Asset-Liability Committee (ALCO) to ensure compliance with board-approved limits[469] - The company retains adjustable-rate loans to mitigate interest rate risk while funding low-risk loans[468] - The company is within policy limits for interest rate risk scenarios as of June 30, 2025[478]

[Executive Summary & Highlights](index=1&type=section&id=1_ExecutiveSummary) Q2 2025 net income declined due to credit loss provisions, despite record tangible book value and strong liquidity [Second Quarter 2025 Financial Performance Overview](index=1&type=section&id=1_1_FinancialPerformanceOverview) Merchants Bancorp reported a significant decrease in Q2 2025 net income and diluted EPS compared to both Q2 2024 and Q1 2025, primarily due to a substantial increase in provision for credit losses. Despite this, tangible book value per common share reached a record high, and the company maintained strong liquidity and saw growth in core deposits Key Financial Highlights (Q2 2025 vs. Prior Periods) | Metric | Q2 2025 | Change vs Q2 2024 | Change vs Q1 2025 | | :-------------------------------- | :-------- | :------------------ | :------------------ | | Net Income | $38.0 million | -$38.4 million | -$20.3 million | | Diluted EPS | $0.60 | -60% | -35% | | Provision for Credit Losses | N/A | +$43.1 million | +$45.3 million | | Tangible Book Value per Common Share | $35.42 | +13% | +1% | | Total Assets | $19.1 billion | +2% (vs Dec 31, 2024) | +2% (vs Mar 31, 2025) | | Core Deposits | $11.4 billion | +22% (vs Dec 31, 2024) | +7% (vs Mar 31, 2025) | | Brokered Deposits | $1.3 billion | -50% (vs Dec 31, 2024) | -27% (vs Mar 31, 2025) | - Completed a **$373.3 million** securitization of 18 multi-family mortgage loans through a Freddie Mac-sponsored Q-Series transaction[1](index=1&type=chunk) [Management Commentary](index=2&type=section&id=1_2_ManagementCommentary) Management acknowledged a difficult quarter due to increased credit loss provisions and charge-offs, largely from mortgage fraud, but highlighted underlying earnings resilience, significant gain on sale of loans, and record tangible book value. They also noted a reduction in delinquencies and special mention loans, and outlined strategies to enhance asset quality and risk management - CEO Michael F. Petrie noted the difficult quarter was marked by **increased provision for credit losses** and **charge-offs** largely associated with **mortgage fraud**, but highlighted **resilience in underlying earnings**, **significant increase in gain on sale of loans**, and **record-high tangible book value**[3](index=3&type=chunk) - The company saw a **17% reduction in total delinquencies** and a **58% decline in loans receivable classified as special mention** during the quarter[3](index=3&type=chunk) - President and COO Michael J. Dunlap stated that strategies have been implemented to address **asset quality issues** and enhance **overall risk management practices** for long-term resilience[4](index=4&type=chunk) [Financial Position & Asset Quality](index=3&type=section&id=2_FinancialPositionAssetQuality) Total assets grew to $19.1 billion, but asset quality was impacted by increased credit loss allowances, while liquidity remained strong [Total Assets](index=3&type=section&id=2_1_TotalAssets) Total assets grew to $19.1 billion as of June 30, 2025, driven primarily by higher balances in mortgage warehouse portfolios, despite significant loan sale transactions. Return on average assets declined - Total assets of **$19.1 billion** at June 30, 2025, increased by **$343.4 million (2%)** compared to March 31, 2025, and **$335.5 million** compared to December 31, 2024, primarily driven by higher balances in mortgage warehouse portfolios[7](index=7&type=chunk) - Return on average assets was **0.80%** for Q2 2025, down from **1.72%** for Q2 2024 and **1.31%** for Q1 2025[8](index=8&type=chunk) [Asset Quality](index=3&type=section&id=2_2_AssetQuality) The allowance for credit losses increased due to higher provision expenses and charge-offs, mainly from multi-family property value declines and mortgage fraud investigations. While substandard loans increased, special mention loans and total criticized loans decreased, and non-performing loans also declined, partly due to charge-offs. The company continues to use credit protection arrangements to mitigate risk - Allowance for credit losses on loans increased by **$8.4 million (10%)** to **$91.8 million** as of June 30, 2025, compared to March 31, 2025, driven by a **$54.5 million** increase in provision expense partially offset by **$46.1 million** in loan charge-offs[9](index=9&type=chunk) - Charge-offs for Q2 2025 totaled **$46.1 million** for 14 customers, primarily in the multi-family loan portfolio, with no recoveries[10](index=10&type=chunk) - Loans classified as substandard increased to **$417.7 million** (June 30, 2025) from **$323.6 million** (March 31, 2025), while loans classified as special mention declined by **58%** to **$171.5 million**[11](index=11&type=chunk) - Overall criticized loans declined by **19%** to **$589.2 million**, and total delinquencies declined by **17%** compared to March 31, 2025[11](index=11&type=chunk) - Non-performing loans were **$251.5 million (2.39% of loans receivable)** as of June 30, 2025, down from **$284.6 million (2.73%)** as of March 31, 2025[13](index=13&type=chunk) - The Company has credit protection arrangements totaling **$3.7 billion** in loans to reduce risk, with **$2.8 billion** subject to these arrangements as of June 30, 2025[14](index=14&type=chunk) [Total Deposits](index=4&type=section&id=2_3_TotalDeposits) Total deposits increased, driven by growth in core demand and savings deposits. Core deposits now represent a higher percentage of total deposits, while brokered deposits significantly decreased - Total deposits of **$12.7 billion** at June 30, 2025, increased by **$280.7 million (2%)** compared to March 31, 2025, and by **$766.9 million (6%)** compared to December 31, 2024, primarily due to growth in core demand deposits and savings[15](index=15&type=chunk) - Core deposits increased by **$744.6 million (7%)** to **$11.4 billion** from March 31, 2025, and by **$2.0 billion (22%)** from December 31, 2024, representing **90%** of total deposits at June 30, 2025[16](index=16&type=chunk) - Total brokered deposits decreased by **$463.9 million (27%)** to **$1.3 billion** from March 31, 2025, and by **$1.3 billion (50%)** from December 31, 2024[17](index=17&type=chunk) [Liquidity](index=4&type=section&id=2_4_Liquidity) The company maintained strong liquidity with increased cash balances and significant unused borrowing capacity, which, combined with other liquid assets, represents a substantial portion of total assets. Its Federal Reserve Bank line of credit alone could fund a large portion of uninsured deposits - Cash balances increased by **$125.9 million (24%)** to **$647.2 million** as of June 30, 2025, compared to March 31, 2025[18](index=18&type=chunk) - Unused borrowing capacity totaled **$5.0 billion** as of June 30, 2025, an increase from **$4.7 billion** at March 31, 2025[18](index=18&type=chunk) - The Company's most liquid assets, combined with unused borrowing capacity, totaled **$11.9 billion**, or **62%** of its **$19.1 billion** total assets at June 30, 2025[20](index=20&type=chunk) - The **$3.3 billion** line of credit availability with the Federal Reserve Bank of Chicago alone could fund **106%** of its uninsured deposits[20](index=20&type=chunk) [Operating Results Analysis](index=5&type=section&id=3_OperatingResultsAnalysis) Operating results showed stable net interest income year-over-year, increased quarter-over-quarter, and significant noninterest income growth [Comparison: Three Months Ended June 30, 2025 vs. June 30, 2024](index=5&type=section&id=3_1_Q22025vsQ22024) Net interest income remained stable year-over-year, but interest income decreased due to lower yields, while interest expense decreased due to lower deposit rates. Noninterest income saw a significant increase, primarily from gain on sale of loans and syndication fees, but noninterest expense also rose substantially due to increased salaries, legal fees, and credit risk transfer premiums - Net Interest Income of **$128.7 million** remained essentially unchanged compared to **$128.1 million** in Q2 2024[23](index=23&type=chunk) - Interest Income decreased by **$23.9 million (7%)** to **$304.4 million**, primarily reflecting lower average yields on higher average balances on loans and loans held for sale[24](index=24&type=chunk) - Net interest margin decreased **16 basis points** to **2.83%**, negatively impacted by a shift in business mix towards lower-margin warehouse loans[25](index=25&type=chunk) - Interest Expense decreased by **$24.5 million (12%)** to **$175.7 million**, reflecting lower average balances at lower average rates on certificates of deposit[26](index=26&type=chunk) - Noninterest Income increased by **$19.1 million (61%)** to **$50.5 million**, driven by a **109% increase in gain on sale of loans** and a **200% increase in syndication and asset management fees**[27](index=27&type=chunk) - Noninterest Expense increased by **$27.0 million (54%)** to **$77.3 million**, primarily due to a **$15.2 million increase in salaries and employee benefits**, a **$7.1 million increase in other expenses** (taxes, legal fees for nonperforming loans), and a **$2.5 million increase in credit risk transfer premium expense**[28](index=28&type=chunk) [Comparison: Three Months Ended June 30, 2025 vs. March 31, 2025](index=7&type=section&id=3_2_Q22025vsQ12025) Net interest income increased quarter-over-quarter, driven by higher interest income from increased loan balances, despite a slight decrease in net interest margin. Noninterest income significantly surged, primarily from gain on sale of loans and syndication fees, but noninterest expense also rose due to increased staffing and costs related to nonperforming loans - Net Interest Income increased by **$6.5 million (5%)** to **$128.7 million**, primarily due to higher average balances on loans and loans held for sale[31](index=31&type=chunk) - Interest Income increased by **$17.2 million (6%)** to **$304.4 million**, reflecting an increase in average balances at lower yields on loans and loans held for sale[32](index=32&type=chunk) - Net interest margin decreased **6 basis points** to **2.83%**, impacted by a shift in business mix towards lower-margin warehouse loans[34](index=34&type=chunk) - Interest Expense increased by **$10.7 million (6%)** to **$175.7 million**, driven by higher average balances on interest-bearing checking accounts and borrowings[33](index=33&type=chunk) - Noninterest Income increased by **$26.8 million (113%)** to **$50.5 million**, primarily due to a **101% increase in gain on sale of loans** and a **186% increase in syndication and asset management fees**[35](index=35&type=chunk) - Noninterest Expense increased by **$15.7 million (25%)** to **$77.3 million**, primarily driven by a **$7.1 million increase in salaries and employee benefits** associated with the addition of production staff, and a **$6.9 million increase in other expenses** related to nonperforming loans[36](index=36&type=chunk) [Company Information](index=9&type=section&id=4_CompanyInformation) Merchants Bancorp is a diversified bank holding company with $19.1 billion in assets, operating through segments, and provides forward-looking statements [About Merchants Bancorp](index=9&type=section&id=4_1_AboutMerchantsBancorp) Merchants Bancorp is a diversified bank holding company headquartered in Carmel, Indiana, with $19.1 billion in assets and $12.7 billion in deposits as of June 30, 2025. It operates through segments including Multi-family Mortgage Banking, Mortgage Warehousing, and Banking, offering a range of financial services - Merchants Bancorp is a **diversified bank holding company** headquartered in Carmel, Indiana[38](index=38&type=chunk) - As of June 30, 2025, the company had **$19.1 billion in assets** and **$12.7 billion in deposits**[38](index=38&type=chunk) - Operating segments include **Multi-family Mortgage Banking**, **Mortgage Warehousing**, and **Banking**, offering various financing, servicing, and traditional banking services[38](index=38&type=chunk) [Forward-Looking Statements](index=9&type=section&id=4_2_ForwardLookingStatements) The press release contains forward-looking statements based on management's current views, which are subject to inherent uncertainties and risks. Actual results may differ materially, and the company does not undertake to update these statements - Forward-looking statements reflect **management's current views** and are based on **expectations, estimates, and projections** about the industry, management's beliefs, and certain assumptions[39](index=39&type=chunk) - These statements are **not guarantees of future performance** and are subject to **risks, assumptions, estimates, and uncertainties** that are difficult to predict[39](index=39&type=chunk) - The Company does **not undertake any obligation to update or revise** any forward-looking statements[39](index=39&type=chunk) [Contacts](index=9&type=section&id=4_3_Contacts) Provides contact information for media and investor relations - Media Contact: Rebecca Marsh, Phone: (317) 805-4356, Email: rmarsh@bankmerchants.com[40](index=40&type=chunk) - Investor Contact: Sean Sievers, Phone: (317) 663-5197, Email: ssievers@bankmerchants.com[40](index=40&type=chunk) [Consolidated Financial Statements](index=10&type=section&id=5_ConsolidatedFinancialStatements) Consolidated balance sheets and income statements for various periods detail assets, liabilities, equity, revenues, expenses, and earnings per share [Consolidated Balance Sheets](index=10&type=section&id=5_1_ConsolidatedBalanceSheets) Presents the company's consolidated balance sheet data as of June 30, 2025, March 31, 2025, December 31, 2024, September 30, 2024, and June 30, 2024, detailing assets, liabilities, and shareholders' equity Consolidated Balance Sheets (Unaudited, In thousands) | | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | --- | --- | --- | --- | --- | --- | | **Assets** | | | | | | | Cash and cash equivalents | $647,165 | $521,296 | $476,610 | $601,906 | $540,882 | | Securities purchased under agreements to resell | 1,539 | 1,550 | 1,559 | 3,279 | 3,304 | | Mortgage loans in process of securitization | 402,427 | 389,797 | 428,206 | 430,966 | 209,244 | | Securities available for sale | 936,343 | 961,183 | 980,050 | 953,063 | 1,017,019 | | Securities held to maturity | 1,548,211 | 1,606,286 | 1,664,686 | 1,755,047 | 1,291,110 | | FHLB stock and other equity securities | 217,850 | 217,850 | 217,804 | 184,050 | 67,499 | | Loans held for sale | 4,105,765 | 3,983,452 | 3,771,510 | 3,808,234 | 3,483,076 | | Loans receivable, net of allowance for credit losses | 10,432,117 | 10,343,724 | 10,354,002 | 10,261,890 | 10,933,189 | | Premises and equipment, net | 71,050 | 67,787 | 58,617 | 53,161 | 46,833 | | Servicing rights | 193,037 | 189,711 | 189,935 | 177,327 | 178,776 | | Interest receivable | 82,391 | 82,811 | 83,409 | 86,612 | 90,360 | | Goodwill | 8,014 | 8,014 | 8,014 | 8,014 | 8,014 | | Other assets and receivables | 495,295 | 424,339 | 571,330 | 329,427 | 343,116 | | **Total assets** | **$19,141,204** | **$18,797,800** | **$18,805,732** | **$18,652,976** | **$18,212,422** | | **Liabilities and Shareholders' Equity** | | | | | | | **Liabilities** | | | | | | | Total deposits | 12,686,835 | 12,406,165 | 11,919,976 | 12,891,887 | 14,917,067 | | Borrowings | 4,009,474 | 4,001,744 | 4,386,122 | 3,568,721 | 1,159,206 | | Deferred tax liabilities | 29,228 | 35,740 | 25,289 | 19,530 | 25,098 | | Other liabilities | 231,035 | 193,416 | 231,035 | 233,731 | 222,904 | | **Total liabilities** | **16,956,572** | **16,637,065** | **16,562,422** | **16,713,869** | **16,324,275** | | **Shareholders' Equity** | | | | | | | Common stock | 241,452 | 240,512 | 240,313 | 239,448 | 238,492 | | Preferred stock (Series C, D, E) | 551,291 | 551,291 | 551,291 | 328,543 | 328,543 | | Retained earnings | 1,392,136 | 1,369,009 | 1,330,995 | 1,250,176 | 1,200,778 | | Accumulated other comprehensive (loss) income | (247) | (77) | (133) | 96 | (510) | | **Total shareholders' equity** | **2,184,632** | **2,160,735** | **2,243,310** | **1,939,107** | **1,888,147** | | **Total liabilities and shareholders' equity** | **$19,141,204** | **$18,797,800** | **$18,805,732** | **$18,652,976** | **$18,212,422** | [Consolidated Statement of Income (Three Months Ended)](index=12&type=section&id=5_2_ConsolidatedStatementOfIncome_3Months) Provides the consolidated statement of income for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, including interest income, interest expense, net interest income, provision for credit losses, noninterest income, noninterest expense, net income, and earnings per share Consolidated Statement of Income (Unaudited, In thousands, except share data) | | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change vs. 1Q25 | Change vs. 2Q24 | | :--------------------------------------- | :------------ | :------------- | :------------ | :-------------- | :-------------- | | **Interest Income** | | | | | | | Loans | $255,641 | $239,280 | $284,421 | 7% | -10% | | Mortgage loans in process of securitization | 5,304 | 3,743 | 3,044 | 42% | 74% | | Investment securities: Available for sale | 12,095 | 12,358 | 14,784 | -2% | -18% | | Investment securities: Held to maturity | 23,166 | 24,358 | 19,799 | -5% | 17% | | FHLB stock and other equity securities (dividends) | 4,641 | 4,372 | 1,277 | 6% | 263% | | Other | 3,552 | 3,093 | 4,948 | 15% | -28% | | **Total interest income** | **304,399** | **287,204** | **328,273** | **6%** | **-7%** | | **Interest Expense** | | | | | | | Deposits | 131,375 | 123,941 | 179,651 | 6% | -27% | | Short-term borrowings | 36,981 | 33,364 | 11,612 | 11% | 218% | | Long-term borrowings | 7,324 | 7,703 | 8,891 | -5% | -18% | | **Total interest expense** | **175,680** | **165,008** | **200,154** | **6%** | **-12%** | | **Net Interest Income** | **128,719** | **122,196** | **128,119** | **5%** | **—** | | Provision for credit losses | 53,027 | 7,727 | 9,965 | 586% | 432% | | **Net Interest Income After Provision for Credit Losses** | **75,692** | **114,469** | **118,154** | **-34%** | **-36%** | | **Noninterest Income** | | | | | | | Gain on sale of loans | 23,342 | 11,619 | 11,168 | 101% | 109% | | Loan servicing fees, net | 6,138 | 4,010 | 10,827 | 53% | -43% | | Mortgage warehouse fees | 2,039 | 1,513 | 1,524 | 35% | 34% | | Syndication and asset management fees | 9,707 | 3,389 | 3,233 | 186% | 200% | | Other income | 9,254 | 3,162 | 4,599 | 193% | 101% | | **Total noninterest income** | **50,480** | **23,693** | **31,351** | **113%** | **61%** | | **Noninterest Expense** | | | | | | | Salaries and employee benefits | 43,566 | 36,419 | 28,373 | 20% | 54% | | Loan expense | 1,142 | 798 | 993 | 43% | 15% | | Occupancy and equipment | 2,494 | 2,351 | 2,239 | 6% | 11% | | Professional fees | 3,159 | 2,894 | 3,556 | 9% | -11% | | Deposit insurance expense | 7,152 | 7,228 | 5,579 | -1% | 28% | | Technology expense | 2,446 | 2,374 | 1,859 | 3% | 32% | | Credit risk transfer premium expense | 4,767 | 3,862 | 2,294 | 23% | 108% | | Other expense | 12,611 | 5,738 | 5,487 | 120% | 130% | | **Total noninterest expense** | **77,337** | **61,664** | **50,380** | **25%** | **54%** | | **Income Before Income Taxes** | **48,835** | **76,498** | **99,125** | **-36%** | **-51%** | | Provision for income taxes | 10,854 | 18,259 | 22,732 | -41% | -52% | | **Net Income** | **$37,981** | **$58,239** | **$76,393** | **-35%** | **-50%** | | Dividends on preferred stock | (10,266) | (10,265) | (7,757) | — | 32% | | Impact of preferred stock redemption | — | (5,371) | (1,823) | -100% | -100% | | **Net Income Available to Common Shareholders** | **$27,715** | **$42,603** | **$66,813** | **-35%** | **-59%** | | Basic Earnings Per Share | $0.60 | $0.93 | $1.50 | -35% | -60% | | Diluted Earnings Per Share | $0.60 | $0.93 | $1.49 | -35% | -60% | [Consolidated Statement of Income (Six Months Ended)](index=13&type=section&id=5_3_ConsolidatedStatementOfIncome_6Months) Presents the consolidated statement of income for the six months ended June 30, 2025, and June 30, 2024, detailing interest income, interest expense, net interest income, provision for credit losses, noninterest income, noninterest expense, net income, and earnings per share Consolidated Statement of Income (Unaudited, In thousands, except share data) | | June 30, 2025 | June 30, 2024 | Change | | :--------------------------------------- | :------------ | :------------ | :----- | | **Interest Income** | | | | | Loans | $494,921 | $556,419 | -11% | | Mortgage loans in process of securitization | 9,047 | 4,764 | 90% | | Investment securities: Available for sale | 24,453 | 29,172 | -16% | | Investment securities: Held to maturity | 47,524 | 40,321 | 18% | | FHLB stock and other equity securities (dividends) | 9,013 | 2,121 | 325% | | Other | 6,645 | 9,649 | -31% | | **Total interest income** | **591,603** | **642,446** | **-8%** | | **Interest Expense** | | | | | Deposits | 255,316 | 350,673 | -27% | | Short-term borrowings | 70,345 | 18,834 | 274% | | Long-term borrowings | 15,027 | 17,764 | -15% | | **Total interest expense** | **340,688** | **387,271** | **-12%** | | **Net Interest Income** | **250,915** | **255,175** | **-2%** | | Provision for credit losses | 60,754 | 14,691 | 314% | | **Net Interest Income After Provision for Credit Losses** | **190,161** | **240,484** | **-21%** | | **Noninterest Income** | | | | | Gain on sale of loans | 34,961 | 20,524 | 70% | | Loan servicing fees, net | 10,148 | 30,229 | -66% | | Mortgage warehouse fees | 3,552 | 2,506 | 42% | | Loss on sale of investments available for sale | — | (108) | 100% | | Syndication and asset management fees | 13,096 | 8,536 | 53% | | Other income | 12,416 | 10,538 | 18% | | **Total noninterest income** | **74,173** | **72,225** | **3%** | | **Noninterest Expense** | | | | | Salaries and employee benefits | 79,985 | 57,969 | 38% | | Loan expense | 1,940 | 1,949 | — | | Occupancy and equipment | 4,845 | 4,476 | 8% | | Professional fees | 6,053 | 7,655 | -21% | | Deposit insurance expense | 14,380 | 10,704 | 34% | | Technology expense | 4,820 | 3,713 | 30% | | Credit risk transfer premium expense | 8,629 | 2,294 | 276% | | Other expense | 18,349 | 10,532 | 74% | | **Total noninterest expense** | **139,001** | **99,292** | **40%** | | **Income Before Income Taxes** | **125,333** | **213,417** | **-41%** | | Provision for income taxes | 29,113 | 49,970 | -42% | | **Net Income** | **$96,220** | **$163,447** | **-41%** | | Dividends on preferred stock | (20,531) | (16,424) | 25% | | Impact of preferred stock redemption | (5,371) | (1,823) | 195% | | **Net Income Available to Common Shareholders** | **$70,318** | **$145,200** | **-52%** | | Basic Earnings Per Share | $1.53 | $3.30 | -54% | | Diluted Earnings Per Share | $1.53 | $3.29 | -53% | [Key Operating Results & Non-GAAP Reconciliation](index=14&type=section&id=6_KeyOperatingResultsNonGAAP) Key operating metrics and non-GAAP reconciliations for three and six-month periods cover efficiency ratios, returns on assets and equity, tangible book value, and capital ratios [Key Operating Results (Three Months Ended)](index=14&type=section&id=6_1_KeyOperatingResults_3Months) Details key operating metrics for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, including efficiency ratio, return on average assets, return on average tangible common shareholders' equity, tangible book value per common share, and capital ratios, along with a reconciliation of non-GAAP measures Key Operating Results (Unaudited, $ in thousands, except share data) | | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change vs. 1Q25 | Change vs. 2Q24 | | :--------------------------------------- | :------------ | :------------- | :------------ | :-------------- | :-------------- | | Noninterest expense | $77,337 | $61,664 | $50,380 | 25% | 54% | | Net interest income (before provision for credit losses) | 128,719 | 122,196 | 128,119 | 5% | — | | Noninterest income | 50,480 | 23,693 | 31,351 | 113% | 61% | | Total income | $179,199 | $145,889 | $159,470 | 23% | 12% | | Efficiency ratio | 43.16% | 42.27% | 31.59% | 89bps | 1,157bps | | Average assets | $18,984,925 | $17,831,950 | $17,814,191 | 6% | 7% | | Net income | 37,981 | 58,239 | 76,393 | -35% | -50% | | Return on average assets | 0.80% | 1.31% | 1.72% | (51)bps | (92)bps | | Return on average tangible common shareholders' equity | 6.75% | 10.65% | 19.55% | (390)bps | (1,280)bps | | Tangible book value per common share | $35.42 | $34.90 | $31.27 | 1% | 13% | | Tangible common shareholders' equity/tangible assets | 8.49% | 8.52% | 7.86% | (3)bps | 63bps | | Total capital/risk-weighted assets | 13.4% | 13.0% | 12.0% | | | | Tier I capital/risk-weighted assets | 12.8% | 12.4% | 11.4% | | | | Common Equity Tier I capital/risk-weighted assets | 9.5% | 9.2% | 8.7% | | | | Tier I capital/average assets | 11.5% | 12.1% | 10.6% | | | Reconciliation of Non-GAAP Measures (Three Months Ended) | | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change vs. 1Q25 | Change vs. 2Q24 | | :--------------------------------------- | :------------ | :------------- | :------------ | :-------------- | :-------------- | | Net income | $37,981 | $58,239 | $76,393 | -35% | -50% | | Less: preferred stock dividends | (10,266) | (10,265) | (7,757) | — | 32% | | Less: impact of preferred stock redemption | - | (5,371) | (1,823) | -100% | -100% | | Net income available to common shareholders | $27,715 | $42,603 | $66,813 | -35% | -59% | | Average shareholders' equity | $2,201,836 | $2,160,169 | $1,824,730 | 2% | 21% | | Less: average goodwill & intangibles | (8,065) | (8,070) | (8,140) | — | -1% | | Less: average preferred stock | (551,290) | (552,633) | (449,387) | — | 23% | | Average tangible common shareholders' equity | $1,642,481 | $1,599,466 | $1,367,203 | 3% | 20% | | Return on average tangible common shareholders' equity | 6.75% | 10.65% | 19.55% | (390)bps | (1,280)bps | | Total equity | $2,184,632 | $2,160,735 | $1888,147 | 1% | 16% | | Less: goodwill and intangibles | (8,062) | (8,068) | (8,108) | — | -1% | | Less: preferred stock | (551,291) | (551,291) | (449,387) | — | 23% | | Tangible common shareholders' equity | $1,625,279 | $1,601,376 | $1,430,652 | 1% | 14% | | Assets | $19,141,204 | $18,797,800 | $18,212,422 | 2% | 5% | | Less: goodwill and intangibles | (8,062) | (8,068) | (8,108) | — | -1% | | Tangible assets | $19,133,142 | $18,789,732 | $18,204,314 | 2% | 5% | | Ending common shares | 45,885,458 | 45,881,706 | 45,757,567 | | | | Tangible book value per common share | $35.42 | $34.90 | $31.27 | 1% | 13% | | Tangible common shareholders' equity/tangible assets | 8.49% | 8.52% | 7.86% | (3)bps | 63bps | [Key Operating Results (Six Months Ended)](index=16&type=section&id=6_2_KeyOperatingResults_6Months) Presents key operating metrics for the six months ended June 30, 2025, and June 30, 2024, including efficiency ratio, return on average assets, return on average tangible common shareholders' equity, tangible book value per common share, and capital ratios, along with a reconciliation of non-GAAP measures Key Operating Results (Unaudited, $ in thousands, except share data) | | June 30, 2025 | June 30, 2024 | Change | | :--------------------------------------- | :------------ | :------------ | :----- | | Noninterest expense | $139,001 | $99,292 | 40% | | Net interest income (before provision for credit losses) | 250,915 | 255,175 | -2% | | Noninterest income | 74,173 | 72,225 | 3% | | Total income | $325,088 | $327,400 | -1% | | Efficiency ratio | 42.76% | 30.33% | 1,243bps | | Average assets | $18,411,623 | $17,303,632 | 6% | | Net income | 96,220 | 163,447 | -41% | | Return on average assets | 1.05% | 1.89% | (84)bps | | Return on average tangible common shareholders' equity | 8.68% | 22.30% | (1,362)bps | | Tangible book value per common share | $35.42 | $31.27 | 13% | | Tangible common shareholders' equity/tangible assets | 8.49% | 7.86% | 63bps | Reconciliation of Non-GAAP Measures (Six Months Ended) | | June 30, 2025 | June 30, 2024 | Change | | :--------------------------------------- | :------------ | :------------ | :----- | | Net income | $96,220 | $163,447 | -41% | | Less: preferred stock dividends | (20,531) | (16,424) | 25% | | Less: impact of preferred stock redemption | (5,371) | (1,823) | 195% | | Net income available to common shareholders | $70,318 | $145,200 | -52% | | Average shareholders' equity | $2,181,117 | $1,786,195 | 22% | | Less: average goodwill & intangibles | (8,067) | (9,317) | -13% | | Less: average preferred stock | (551,958) | (474,497) | 16% | | Average tangible common shareholders' equity | $1,621,092 | $1,302,381 | 24% | | Return on average tangible common shareholders' equity | 8.68% | 22.30% | (1,362)bps | | Total equity | $2,184,632 | $1,888,147 | 16% | | Less: goodwill and intangibles | (8,062) | (8,108) | -1% | | Less: preferred stock | (551,291) | (449,387) | 23% | | Tangible common shareholders' equity | $1,625,279 | $1,430,652 | 14% | | Assets | $19,141,204 | $18,212,422 | 5% | | Less: goodwill and intangibles | (8,062) | (8,108) | -1% | | Tangible assets | $19,133,142 | $18,204,314 | 5% | | Ending common shares | 45,885,458 | 45,757,567 | | | | Tangible book value per common share | $35.42 | $31.27 | 13% | | Tangible common shareholders' equity/tangible assets | 8.49% | 7.86% | 63bps | [Supplemental Financial Data](index=18&type=section&id=7_SupplementalFinancialData) Detailed average balance analysis, segment performance, loan portfolio specifics including credit risk and nonperforming assets, and deposit composition are provided [Average Balance Analysis](index=18&type=section&id=7_1_AverageBalanceAnalysis) Provides a detailed average balance analysis for interest-earning assets and interest-bearing liabilities for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, including average balances, interest income/expense, and rates, as well as net interest spread and margin Average Balance Analysis (Unaudited, $ in thousands) | | June 30, 2025 | | | March 31, 2025 | | | June 30, 2024 | | | | :--------------------------------------- | :------------ | :-------- | :----- | :------------- | :-------- | :----- | :------------ | :-------- | :----- | | | Average Balance | Interest | Yield/Rate | Average Balance | Interest | Yield/Rate | Average Balance | Interest | Yield/Rate | | **Assets:** | | | | | | | | | | | Interest-earning deposits, and other interest or dividends | $539,357 | $8,193 | 6.09% | $511,077 | $7,465 | 5.92% | $438,445 | $6,225 | 5.71% | | Securities available for sale | 955,186 | 12,095 | 5.08% | 961,065 | 12,358 | 5.21% | 1,039,388 | 14,784 | 5.72% | | Securities held to maturity | 1,572,186 | 23,166 | 5.91% | 1,643,703 | 24,358 | 6.01% | 1,160,170 | 19,799 | 6.86% | | Mortgage loans in process of securitization | 376,904 | 5,304 | 5.64% | 277,426 | 3,743 | 5.47% | 234,706 | 3,044 | 5.22% | | Loans and loans held for sale | 14,826,151 | 255,641 | 6.92% | 13,751,197 | 239,280 | 7.06% | 14,347,165 | 284,421 | 7.97% | | **Total interest-earning assets** | **18,269,784** | **304,399** | **6.68%** | **17,144,468** | **287,204** | **6.79%** | **17,219,874** | **328,273** | **7.67%** | | Allowance for credit losses on loans | (90,860) | | | (86,711) | | | (76,456) | | | | Noninterest-earning assets | 806,001 | | | 774,193 | | | 670,773 | | | | **Total assets** | **$18,984,925** | | | **$17,831,950** | | | **$17,814,191** | | | | **Liabilities & Shareholders' Equity:** | | | | | | | | | | | Interest-bearing checking | $6,161,736 | 60,845 | 3.96% | $5,121,343 | 50,609 | 4.01% | $4,935,123 | 58,128 | 4.74% | | Savings deposits | 145,162 | 8 | 0.02% | 146,359 | 15 | 0.04% | 145,262 | 19 | 0.05% | | Money market | 3,354,820 | 35,137 | 4.20% | 3,398,469 | 34,506 | 4.12% | 2,788,335 | 33,207 | 4.79% | | Certificates of deposit | 3,090,250 | 35,385 | 4.59% | 3,369,269 | 38,811 | 4.67% | 6,535,651 | 88,297 | 5.43% | | **Total interest-bearing deposits** | **12,751,968** | **131,375** | **4.13%** | **12,035,440** | **123,941** | **4.18%** | **14,404,371** | **179,651** | **5.02%** | | Borrowings | 3,453,960 | 44,305 | 5.15% | 3,125,935 | 41,067 | 5.33% | 1,031,180 | 20,503 | 8.00% | | **Total interest-bearing liabilities** | **16,205,928** | **175,680** | **4.35%** | **15,161,375** | **165,008** | **4.41%** | **15,435,551** | **200,154** | **5.22%** | | Noninterest-bearing deposits | 376,217 | | | 294,248 | | | 331,246 | | | | Noninterest-bearing liabilities | 200,944 | | | 216,158 | | | 222,664 | | | | **Total liabilities** | **16,783,089** | | | **15,671,781** | | | **15,989,461** | | | | Shareholders' equity | 2,201,836 | | | 2,160,169 | | | 1,824,730 | | | | **Total liabilities and shareholders' equity** | **$18,984,925** | | | **$17,831,950** | | | **$17,814,191** | | | | Net interest income | | $128,719 | | | $122,196 | | | $128,119 | | | Net interest spread | | | 2.33% | | | 2.38% | | | 2.45% | | Net interest-earning assets | $2,063,856 | | | $1,983,093 | | | $1,784,323 | | | | Net interest margin | | | 2.83% | | | 2.89% | | | 2.99% | [Segment Performance](index=19&type=section&id=7_2_SegmentPerformance) Breaks down net income and total assets by segment (Multi-family Mortgage Banking, Mortgage Warehousing, Banking, Other) for various periods, and provides gain on sale of loans by loan type Net Income by Segment (Unaudited, $ in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Multi-family Mortgage Banking | $9,269 | $3,413 | $9,037 | $12,682 | $25,646 | | Mortgage Warehousing | 22,986 | 15,398 | 22,270 | 38,384 | 42,460 | | Banking | 14,574 | 47,107 | 52,378 | 61,681 | 108,803 | | Other | (8,848) | (7,679) | (7,292) | (16,527) | (13,462) | | **Total** | **$37,981** | **$58,239** | **$76,393** | **$96,220** | **$163,447** | Total Assets by Segment (Unaudited, $ in thousands) | Segment | June 30, 2025 Amount (%) | March 31, 2025 Amount (%) | December 31, 2024 Amount (%) | | :-------------------------- | :----------------------- | :------------------------ | :------------------------- | | Multi-family Mortgage Banking | $487,853 (2%) | $460,441 (3%) | $479,099 (2%) | | Mortgage Warehousing | 6,999,701 (37%) | 5,902,165 (31%) | 6,000,624 (32%) | | Banking | 11,404,488 (60%) | 12,002,564 (64%) | 11,761,202 (63%) | | Other | 249,162 (1%) | 432,630 (2%) | 564,807 (3%) | | **Total** | **$19,141,204 (100%)** | **$18,797,800 (100%)** | **$18,805,732 (100%)** | Gain on Sale of Loans by Loan Type (Unaudited, $ in thousands) | Loan Type | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Multi-family | $19,815 | $10,125 | $9,083 | $29,940 | $17,506 | | Single-family | 2,428 | 206 | 524 | 2,634 | 804 | | Small Business Association (SBA) | 1,099 | 1,288 | 1,561 | 2,387 | 2,214 | | **Total** | **$23,342** | **$11,619** | **$11,168** | **$34,961** | **$20,524** | Servicing Rights (Unaudited, $ in thousands) | | June 30, 2025 | March 31, 2025 | June 30, 2024 | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :-------------------------- | :------------ | :------------- | :------------ | :----------------------- | :----------------------- | | Balance, beginning of period | $189,711 | $189,935 | $172,200 | $189,935 | $158,457 | | Additions: Purchased servicing | 70 | - | - | 70 | - | | Additions: Originated servicing | 5,244 | 3,338 | 3,761 | 8,582 | 5,927 | | Subtractions: Paydowns | (2,246) | (2,808) | (2,252) | (5,054) | (4,639) | | Subtractions: Changes in fair value | 258 | (754) | 5,067 | (496) | 19,031 | | **Balance, end of period** | **$193,037** | **$189,711** | **$178,776** | **$193,037** | **$178,776** | [Loan Portfolio Details](index=20&type=section&id=7_3_LoanPortfolioDetails) Details the composition of loans receivable and loans held for sale, including mortgage warehouse repurchase agreements, residential real estate, multi-family financing, healthcare financing, commercial, agricultural, and consumer loans. It also provides a loan credit risk profile, nonperforming loan data, and delinquent loan information Loans Receivable and Loans Held for Sale (Unaudited, $ in thousands) | | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :------------- | :---------------- | | Mortgage warehouse repurchase agreements | $1,843,742 | $1,408,239 | $1,446,068 | | Residential real estate | 988,783 | 1,332,601 | 1,322,853 | | Multi-family financing | 4,833,548 | 4,600,117 | 4,624,299 | | Healthcare financing | 1,442,095 | 1,583,290 | 1,484,483 | | Commercial and commercial real estate | 1,328,765 | 1,418,741 | 1,476,211 | | Agricultural production and real estate | 82,425 | 79,190 | 77,631 | | Consumer and margin loans | 4,570 | 4,959 | 6,843 | | **Loans receivable** | **10,523,928** | **10,427,137** | **10,438,388** | | Less: Allowance for credit losses on loans | 91,811 | 83,413 | 84,386 | | **Loans receivable, net** | **$10,432,117** | **$10,343,724** | **$10,354,002** | | Loans held for sale | 4,105,765 | 3,983,452 | 3,771,510 | | **Total loans, net of allowance** | **$14,537,882** | **$14,327,176** | **$14,125,512** | Loan Credit Risk Profile (Unaudited, $ in thousands) | | June 30, 2025 Amount (%) | March 31, 2025 Amount (%) | December 31, 2024 Amount (%) | | :---------------- | :----------------------- | :------------------------ | :------------------------- | | Pass | $9,934,759 (94.4%) | $9,695,595 (93.0%) | $9,741,087 (93.3%) | | Special mention | 171,512 (1.6%) | 407,895 (3.9%) | 379,969 (3.6%) | | Substandard | 417,657 (4.0%) | 323,647 (3.1%) | 317,332 (3.0%) | | Doubtful | — (—) | — (—) | — (—) | | **Loans receivable** | **$10,523,928 (100.0%)** | **$10,427,137 (100.0%)** | **$10,438,388 (100.0%)** | | Charge-offs (year-to-date) | $56,570 | $10,507 | $10,587 | | Recoveries (year-to-date) | $28 | $28 | $136 | Nonperforming Loans (Unaudited, $ in thousands) | | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :------------- | :---------------- | | Nonaccrual loans | $250,818 | $284,019 | $279,716 | | 90 days past due and still accruing | 714 | 585 | 6 | | **Total nonperforming loans** | **$251,532** | **$284,604** | **$279,722** | | Other real estate owned | $7,049 | $7,049 | $8,209 | | **Total nonperforming assets** | **$258,581** | **$291,653** | **$287,931** | | Nonperforming loans to total loans receivable | 2.39% | 2.73% | 2.68% | | Nonperforming assets to total assets | 1.35% | 1.55% | 1.53% | Delinquent Loans (Unaudited, $ in thousands) | | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :------------- | :---------------- | | Delinquent loans: Loans receivable | $279,009 | $304,560 | $292,263 | | Delinquent loans: Loans held for sale | - | 30,103 | 32,343 | | **Total delinquent loans** | **$279,009** | **$334,663** | **$324,606** | | Total loans receivable and loans held for sale | $14,629,693 | $14,410,589 | $14,209,898 | | Delinquent loans to total loans | 1.91% | 2.32% | 2.28% | [Deposit Composition](index=21&type=section&id=7_4_DepositComposition) Provides a detailed breakdown of deposits, distinguishing between noninterest-bearing and interest-bearing deposits, and further categorizing them into core demand, brokered demand, savings, and certificates of deposit Deposits (Unaudited, $ in thousands) | | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :------------- | :---------------- | | Noninterest-bearing deposits: Core demand deposits | $315,523 | $313,296 | $239,005 | | Interest-bearing deposits: Core demand deposits | 6,066,933 | 5,432,133 | 4,319,512 | | Interest-bearing deposits: Brokered demand deposits | 250,000 | - | - | | **Total interest-bearing demand deposits** | **6,316,933** | **5,432,133** | **4,319,512** | | Savings deposits: Core savings deposits | 3,703,270 | 3,618,210 | 3,442,111 | | Savings deposits: Brokered savings deposits | 358 | 353 | 859 | | **Total savings deposits** | **3,703,628** | **3,618,563** | **3,442,970** | | Certificates of deposit: Core certificates of deposits | 1,346,630 | 1,324,126 | 1,385,270 | | Certificates of deposit: Brokered certificates of deposits | 1,004,121 | 1,718,047 | 2,533,219 | | **Total certificates of deposits** | **2,350,751** | **3,042,173** | **3,918,489** | | **Total interest-bearing deposits** | **12,371,312** | **12,092,869** | **11,680,971** | | **Total deposits** | **$12,686,835** | **$12,406,165** | **$11,919,976** | | **Total core deposits** | **$11,432,356** | **$10,687,765** | **$9,385,898** | | **Total brokered deposits** | **$1,254,479** | **$1,718,400** | **$2,534,078** | | **Total deposits** | **$12,686,835** | **$12,406,165** | **$11,919,976** |

Financial Performance - Noninterest expense increased to $61,664 thousand in Q1 2025 from $48,912 thousand in Q1 2024, reflecting a rise of 26%[395] - Net interest income before provision for credit losses decreased to $122,196 thousand in Q1 2025 from $127,056 thousand in Q1 2024, a decline of 3%[395] - Total income fell to $145,889 thousand in Q1 2025 compared to $167,930 thousand in Q1 2024, representing a decrease of 13%[395] - The efficiency ratio worsened to 42.27% in Q1 2025 from 29.13% in Q1 2024, indicating increased operational costs relative to income[395] Equity and Assets - Total equity rose to $2,160,735 thousand in Q1 2025 from $1,776,468 thousand in Q1 2024, an increase of 22%[395] - Tangible common shareholders' equity increased to $1,601,376 thousand in Q1 2025 from $1,268,697 thousand in Q1 2024, a growth of 26%[395] - Assets grew to $18,797,800 thousand in Q1 2025 from $17,822,576 thousand in Q1 2024, reflecting an increase of 5.5%[395] - Tangible book value per common share increased to $34.90 in Q1 2025 from $29.26 in Q1 2024, a rise of 19%[395] Interest Rate Sensitivity - The company aims to limit the change in net interest income to 20% for a +/-100 basis point move in interest rates and 30% for a +/-200 basis point move[388] - Economic Value of Equity (EVE) results indicate that as interest rates rise, the economic value of equity is expected to decrease, with a projected change of -0.5% for a +200 basis point shift in rates as of March 31, 2025[390]

Financial Performance - First quarter 2025 net income was $58.2 million, a decrease of $28.8 million or 33% compared to the first quarter of 2024, and a decrease of $37.4 million or 39% compared to the fourth quarter of 2024[1][5]. - Diluted earnings per common share for the first quarter 2025 were $0.93, down 48% from $1.80 in the first quarter of 2024 and down 50% from $1.85 in the fourth quarter of 2024[2]. - Net income available to common shareholders decreased by 50% to $42,603,000 compared to the previous quarter and 46% compared to the same quarter last year[54]. - The efficiency ratio increased to 42.27%, up 965 basis points from the previous quarter and 1,314 basis points from the same quarter last year[52]. - Net interest income decreased by $4.9 million or 4% to $122.2 million, primarily due to lower interest income and higher interest expense on borrowings[27]. - Noninterest income decreased by $17.2 million, or 42%, to $23.7 million compared to $40.9 million, primarily due to a $15.4 million decrease in loan servicing fees[31]. - Noninterest income fell by 60% to $23,693,000 compared to the previous quarter and 42% compared to the same quarter last year[52]. - The company reported a net interest income of $122.20 million for the quarter, down from $134.62 million in the previous quarter[57]. Asset and Deposit Growth - Total assets increased by $975.2 million or 5% year-over-year to $18.8 billion as of March 31, 2025, remaining essentially unchanged from December 31, 2024[8]. - Core deposits reached $10.7 billion, an increase of $2.5 billion or 30% compared to March 31, 2024, and an increase of $1.3 billion or 14% compared to December 31, 2024, representing 86% of total deposits[21]. - Total deposits increased to $12,406,165 as of March 31, 2025, compared to $11,919,976 on December 31, 2024, reflecting a growth of approximately 4.1%[46]. - Cash balances increased by $12.5 million or 2% to $521.3 million as of March 31, 2025, with significant borrowing capacity remaining[23]. - Noninterest-bearing deposits rose to $313,296 as of March 31, 2025, from $239,005 on December 31, 2024, marking a significant increase of approximately 31%[46]. - Interest-bearing deposits increased to $12,092,869 as of March 31, 2025, compared to $11,680,971 on December 31, 2024, reflecting a growth of about 3.5%[46]. Loan Performance - Non-performing loans increased to $284.6 million, or 2.73% of loans receivable, compared to $131.8 million or 1.22% as of March 31, 2024[14]. - Loans receivable, net of allowance for credit losses, stood at $10,343,724 as of March 31, 2025, showing a decrease from $10,354,002 on December 31, 2024[46]. - The amount of special mention loans is $407,895, which is 3.9% of total loans[63]. - The total nonperforming assets amount to $291,653, which is 1.55% of total assets[63]. - The percentage of nonaccrual loans is $284,019, with a slight increase from the previous quarter[63]. Interest Income and Expense - Interest Income decreased by $34.1 million, or 11%, to $287.2 million compared to $321.3 million, reflecting a decrease in average yield and balances on loans[36]. - Interest Expense decreased by $22.1 million, or 12%, to $165.0 million compared to $187.1 million[30]. - Total interest income decreased by 11% to $287,204,000 compared to the previous quarter and 9% compared to the same quarter last year[49]. - The net interest margin was 2.89%, a decrease of 25 basis points compared to 3.14% in the previous year[29]. - The company reported a net interest spread of 2.38% for the quarter, down from 2.46% in the previous quarter[57]. Equity and Shareholder Information - Shareholders' equity increased to $2,160,735 as of March 31, 2025, compared to $2,243,310 on December 31, 2024, reflecting a decrease of about 3.7%[46]. - Total equity of shareholders was reported at $2,160,735,000, with total liabilities and shareholders' equity amounting to $18,797,800[47]. - Issued and outstanding shares totaled 196,181,000, with equivalent to 78,470,000 depositary shares[47]. - Authorized shares reached 300,000,000, with issued and outstanding shares at 142,500,000[47]. - Tangible book value per common share increased by 2% to $34.90 compared to the previous quarter and 19% compared to the same quarter last year[55]. Future Outlook - The company maintained a solid liquidity position with a focus on future growth strategies[47]. - Future outlook includes potential market expansion and new product development initiatives[47].

Employee Relations and Engagement - As of December 31, 2024, the company had approximately 663 employees, with 388 located in Central Indiana[45] - The company achieved a turnover rate of only 9% in 2024, reflecting positive employee relations and engagement[46] - The company was recognized as one of the "Best Places to Work in Indiana" from 2016 to 2023 and as a "Top Workplace" by The Indianapolis Star in 2023 and 2024[46] - The company has established an Employee Stock Ownership Plan (ESOP) that includes a discretionary contribution equal to 3% of an employee's eligible compensation under the 401(k) plan[48] - The company continuously evaluates employee health and safety measures to ensure a productive work environment[48] Business Model and Growth Strategy - The company focuses on sustainable, long-term growth and value creation through its ESG initiatives, including investments in affordable housing projects[49][51] - The company is one of the largest government-sponsored entity multi-family lenders, emphasizing support for affordable housing and skilled nursing facilities[50] - The company has acquired private equity interests in affordable housing projects that generate low-income housing tax credits[51] - The company has a diversified business model that distinguishes it from competitors in the financial services sector[44] Regulatory Environment - The company is subject to extensive regulation under federal and state law, impacting its growth and earnings performance[55] - As of December 31, 2024, Merchants Bank was categorized as "well capitalized" with a total risk-based capital ratio of at least 10% and a Tier 1 risk-based capital ratio of at least 8%[85] - The FDIC's risk-based assessment system requires insured institutions to pay deposit insurance premiums based on the risk they pose to the Deposit Insurance Fund (DIF), with an increase in initial base deposit insurance assessment rates by two basis points starting in 2023[90][91] - Merchants Bank is not subject to the special assessment imposed by the FDIC on banks with assets over $5 billion, as it has less than $5 billion in uninsured deposits[93] - The Dodd-Frank Act imposed more stringent capital requirements on bank holding companies, affecting the operations of Merchants Bank, which had assets exceeding $10 billion for four consecutive quarters in 2023 and 2024[99][104] - The Simplification Rule raised the threshold for deducting servicing rights from Common Equity Tier 1 capital from 10% to 25% of common equity, effective January 1, 2020[88] - Merchants Bank must obtain approval from the Indiana Department of Financial Institutions prior to paying dividends that exceed the sum of its net income for the year to date combined with its retained net income for the previous two years[95] - The Community Reinvestment Act requires Merchants Bank to meet the credit needs of its local community, and the company is currently operating under an approved CRA strategic plan through 2025[98] Information Security - The company maintains a comprehensive information security program to protect customer information, including annual risk assessments and an Incident Response Plan[101] Capital Distribution and Compliance - The capital regulations limit Merchants Bank's ability to make capital distributions if it does not hold a capital conservation buffer of 2.5% above the required minimum risk-based capital ratios[97] - The company does not expect the CFPB's rules to have a significant impact on its operations, except for higher compliance costs related to mortgage lending regulations[105] - The CFPB's new rule on "qualified mortgages" removed the 43% debt-to-income ratio requirement, effective June 30, 2021, but most loans originated by Merchants Bank still qualify under the revised definition[107] - The CFPB's mortgage servicing rules have increased servicing costs across the industry since their implementation in 2014, impacting Merchants Bank's operations[108] - Merchants Bank has voluntarily adopted many servicing and foreclosure standards due to competitive pressures, despite not being a party to state agency settlements regarding foreclosure practices[109] Interest Rate Risk Management - The bank's interest rate risk management policy aims to limit changes in net interest income to 20% for a +/- 100 basis point move in interest rates and 30% for a +/- 200 basis point move[439] - As of December 31, 2024, the projected dollar change in net interest income for a +200 basis point shift is $68,263, reflecting a 13.1% increase[439] - The Economic Value of Equity (EVE) is projected to decrease by $2,990 for a +200 basis point shift in interest rates as of December 31, 2024[441] - The bank's EVE management policy limits changes to 15% for a +/- 100 basis point move and 20% for a +/- 200 basis point move, with compliance confirmed for all scenarios[441] - Interest rate risk is primarily managed through the Asset-Liability Committee (ALCO), which meets quarterly to monitor sensitivity and ensure compliance with risk limits[434] - The bank's loan portfolio includes low-risk multi-family, residential, and SBA loans, which are retained to mitigate interest rate risk[433] Forward-Looking Statements - The bank's forward-looking statements are subject to various risks and uncertainties that could materially affect actual results, including economic conditions and regulatory changes[115]

Financial Performance - Full year 2024 net income reached $320.4 million, a 15% increase compared to 2023[1] - Fourth quarter 2024 net income was $95.7 million, up 23% from Q4 2023 and 56% from Q3 2024[2] - Noninterest income for Q4 2024 increased by $24.7 million, or 72%, compared to Q4 2023[4] - Net income for Q4 2024 reached $95,666, representing a 56% increase from Q3 2024 and a 23% increase from Q4 2023[51] - Total income for the twelve months ended December 31, 2024, was $670,732,000, a 19% increase compared to $562,739,000 in 2023[55] - Noninterest income increased by 29% to $148,112,000 for the twelve months ended December 31, 2024, compared to $114,668,000 in 2023[55] Assets and Liabilities - Total assets increased to $18.8 billion, an 11% rise compared to December 31, 2023[7] - The company reported total assets of $18.8 billion and deposits of $11.9 billion as of December 31, 2024[39] - Total assets increased to $18,805,732 thousand as of December 31, 2024, up from $16,952,516 thousand a year earlier, representing a growth of 10.9%[44] - Total liabilities stood at $16,562,422 thousand, a decrease from $16,713,869 thousand in the previous quarter[44] - Total equity as of December 31, 2024, was $2,243,310,000, a 32% increase from $1,701,084,000 in 2023[56] Loans and Credit Quality - Loans receivable increased by $226.2 million, or 2%, compared to December 31, 2023[1] - Non-performing loans were $279.7 million, or 2.68% of gross loans, compared to 0.80% a year earlier[12] - The allowance for credit losses on loans was $84.4 million, an 18% increase from December 31, 2023[9] - The total delinquent loans to total loans ratio improved to 2.28% as of December 31, 2024, down from 2.69% in the previous quarter[64] - Nonperforming loans increased to $279,722 thousand as of December 31, 2024, compared to $210,902 thousand in the previous quarter, reflecting a rise of 32.6%[64] Deposits - Core deposits rose to $9.4 billion, a 16% increase from December 31, 2023[19] - Total deposits decreased by $2.1 billion, or 15%, compared to December 31, 2023[18] - Total deposits decreased to $11,919,976 thousand from $12,891,887 thousand in the previous quarter, reflecting a decline of 7.5%[44] - Noninterest-bearing deposits fell to $239,005 thousand, down 23.5% from $311,386 thousand in the previous quarter[44] Income and Expenses - Net Interest Income rose by $1.8 million, or 1%, to $134.6 million, driven by higher average balances on borrowings at lower interest rates[32] - Noninterest Expense increased by $10.6 million, or 20%, to $63.2 million, primarily due to higher salaries and a 61% increase in deposit insurance expenses[30] - Interest Expense decreased by $19.4 million, or 9%, to $186.7 million, primarily due to lower rates on certificates of deposit[35] - Total interest income for Q4 2024 was $321,346, a decrease of 5% from Q3 2024 but an increase of 3% year-over-year[47] Efficiency and Ratios - The efficiency ratio improved to 32.62%, a decrease of 838 basis points compared to 41.00%[38] - Return on average assets for Q4 2024 was 2.07%, an increase of 73 basis points from Q4 2023[51] - Return on average tangible common shareholders' equity for Q4 2024 was 22.10%, up 767 basis points from Q3 2024[53] Shareholder Value - Tangible book value per common share reached $34.15, a 25% increase from Q4 2023[1] - Basic earnings per share for Q4 2024 was $1.86, up 59% from Q3 2024 and 17% from Q4 2023[47] - Shareholders' equity increased to $2,243,310 thousand, compared to $1,939,107 thousand a year ago, marking a growth of 15.7%[45]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Merchants Bancorp's unaudited condensed consolidated financial statements for Q3 and YTD September 30, 2024, along with detailed notes [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Q3 2024 net income decreased to $61.3 million, while YTD net income increased to $224.7 million, with total assets growing to $18.7 billion and deposits decreasing, offset by higher borrowings Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2024 | December 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **$18,652,976** | **$16,952,516** | **+10.0%** | | Loans receivable, net | $10,261,890 | $10,127,801 | +1.3% | | Loans held for sale | $3,808,234 | $3,144,756 | +21.1% | | Securities held to maturity | $1,755,047 | $1,204,217 | +45.7% | | **Total Liabilities** | **$16,713,869** | **$15,251,432** | **+9.6%** | | Total deposits | $12,891,887 | $14,061,460 | -8.3% | | Borrowings | $3,568,721 | $964,127 | +270.1% | | **Total Shareholders' Equity** | **$1,939,107** | **$1,701,084** | **+14.0%** | Condensed Consolidated Income Statement Highlights (in thousands, except EPS) | Metric | Q3 2024 | Q3 2023 | Change (%) | YTD 2024 | YTD 2023 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $132,821 | $117,436 | +13.1% | $387,996 | $323,746 | +19.8% | | Provision for credit losses | $6,898 | $4,014 | +71.9% | $21,589 | $33,484 | -35.5% | | Noninterest Income | $16,742 | $36,068 | -53.6% | $88,967 | $80,214 | +10.9% | | **Net Income** | **$61,273** | **$81,504** | **-24.8%** | **$224,720** | **$201,761** | **+11.4%** | | **Diluted EPS** | **$1.17** | **$1.68** | **-30.4%** | **$4.45** | **$4.06** | **+9.6%** | - For the nine months ended September 30, 2024, net cash used in operating activities was **$825.3 million** and in investing activities was **$830.8 million**, while financing activities provided **$1.67 billion** in cash, primarily from a significant increase in borrowings[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, loan portfolio composition, increased credit loss allowance, investment changes, a strategic shift to borrowings, regulatory capital, and derivative use - On January 26, 2024, the Company completed the sale of its Farmers-Merchants Bank of Illinois branches, selling approximately **$60.8 million** in assets and **$230.6 million** in liabilities, recognizing a net gain of **$715,000**[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) Loan Portfolio Composition (in thousands) | Loan Category | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Mortgage warehouse repurchase agreements | $1,213,429 | $752,468 | | Residential real estate | $1,317,234 | $1,324,305 | | Multi-family financing | $4,456,129 | $4,006,160 | | Healthcare financing | $1,733,674 | $2,356,689 | | Commercial and commercial real estate | $1,548,689 | $1,643,081 | | **Total Loans Receivable (Gross)** | **$10,346,439** | **$10,199,553** | - Nonaccrual loans increased significantly to **$210.8 million** as of September 30, 2024, from **$73.8 million** at December 31, 2023, primarily driven by multi-family and healthcare loans[101](index=101&type=chunk) - The Company completed a **$628.9 million** private securitization of healthcare bridge loans on September 26, 2024, selling them into a REMIC and repurchasing the **$534.5 million** senior security, which was classified as held-to-maturity[111](index=111&type=chunk) - In May 2024, the Company issued **2.4 million** shares of common stock in a public offering, receiving net proceeds of **$97.7 million**. In April 2024, all outstanding shares of the 7% Series A Preferred Stock were redeemed for **$52 million**[195](index=195&type=chunk)[199](index=199&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=76&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2024 net income decline to $61.3 million due to higher provisions and fair value adjustments, offset by YTD growth to $224.7 million, alongside a strategic funding shift, rising nonperforming loans, and strong capital [Financial Condition](index=81&type=section&id=Financial%20Condition) Total assets grew 10% to $18.7 billion, driven by loans held for sale and securities, while deposits decreased 8% and borrowings increased 270% to $3.6 billion, bolstering shareholders' equity to $1.9 billion - Total assets increased by **$1.7 billion** (10%) to **$18.7 billion** at September 30, 2024, from December 31, 2023, primarily due to growth in loans held for sale and securities held to maturity[246](index=246&type=chunk) - The company strategically shifted its funding mix, decreasing total deposits by **$1.2 billion** (8%) while increasing borrowings by **$2.6 billion** (270%), mainly through additional FHLB advances, which were a more cost-effective option[263](index=263&type=chunk)[270](index=270&type=chunk) - Brokered deposits were reduced by **53%** to **$2.8 billion**, representing **22%** of total deposits, down from **42%** at year-end 2023[267](index=267&type=chunk) [Asset Quality](index=87&type=section&id=Asset%20Quality) Asset quality deteriorated with nonperforming loans rising to $210.9 million (2.04% of total loans) due to interest rate pressures on variable-rate multi-family and healthcare loans, leading to increased substandard loans and specific reserves - Total nonperforming loans rose to **$210.9 million** (**2.04%** of total loans) at Q3 2024, a significant increase from **$82.0 million** (**0.80%**) at year-end 2023, attributed to interest rate pressure on variable-rate multi-family and healthcare loans[274](index=274&type=chunk) - Loans classified as Substandard increased to **$287.8 million** from **$128.6 million** at year-end 2023, with specific reserves of **$19.2 million** established for these impaired loans[280](index=280&type=chunk) - The company is actively managing credit risk through credit protection arrangements (credit linked notes and a credit default swap) covering a **$1.3 billion** loan portfolio as of September 30, 2024[283](index=283&type=chunk) [Results of Operations](index=89&type=section&id=Results%20of%20Operations) Q3 2024 net income decreased 25% to $61.3 million due to lower servicing fees, higher expenses, and increased credit loss provisions, while YTD net income grew 11% to $224.7 million driven by net interest income and lower provisions Q3 2024 vs Q3 2023 Performance Drivers | Metric | Change | Reason | | :--- | :--- | :--- | | Net Interest Income | +$15.4M (+13%) | Higher average loan balances | | Provision for Credit Losses | +$2.9M (+72%) | Increased specific reserves on certain borrowers | | Loan Servicing Fees | -$18.9M (-109%) | Negative fair market value adjustments on servicing rights and derivatives | | Noninterest Expense | +$18.4M (+43%) | Higher commissions, deposit insurance, and credit default swap premiums | Nine Months 2024 vs 2023 Performance Drivers | Metric | Change | Reason | | :--- | :--- | :--- | | Net Interest Income | +$64.3M (+20%) | Higher average balances and yields on earning assets | | Provision for Credit Losses | -$11.9M (-36%) | Lower loan charge-offs and fewer changes to qualitative factors | | Noninterest Income | +$8.8M (+11%) | Higher gain on sale of loans and syndication fees | | Noninterest Expense | +$38.6M (+32%) | Higher salaries/commissions and deposit insurance | - Net interest margin for Q3 2024 was **2.99%**, unchanged from Q3 2023. The nine-month NIM was **3.04%**, a slight decrease from **3.07%** in the prior year, negatively impacted by interest reversals on new nonaccrual loans[288](index=288&type=chunk)[319](index=319&type=chunk) [Segment Performance](index=107&type=section&id=Segment%20Performance) In Q3 2024, all three segments experienced net income declines, with Multi-family Mortgage Banking down 45% to $8.1 million, Mortgage Warehousing down 20% to $15.9 million, and Banking down 14% to $45.0 million Segment Net Income (in thousands) | Segment | Q3 2024 | Q3 2023 | Change (%) | YTD 2024 | YTD 2023 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Multi-family Mortgage Banking | $8,068 | $14,685 | -45.1% | $33,714 | $27,893 | +20.9% | | Mortgage Warehousing | $15,940 | $19,926 | -20.0% | $58,400 | $47,163 | +23.8% | | Banking | $44,983 | $52,445 | -14.2% | $153,786 | $144,402 | +6.5% | - The Multi-family Mortgage Banking segment's Q3 income was heavily impacted by a **$5.1 million** negative fair value adjustment to servicing rights, compared to a **$10.4 million** positive adjustment in Q3 2023[358](index=358&type=chunk)[359](index=359&type=chunk) - The Mortgage Warehousing segment funded **$13.1 billion** in loans in Q3 2024, a **22%** increase YoY, outperforming the industry's **21%** growth[367](index=367&type=chunk) [Liquidity and Capital Resources](index=112&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $5.1 billion in unused borrowing capacity and $11.1 billion in total liquid assets, while capital resources remain robust with all regulatory ratios exceeding 'well capitalized' thresholds - The company has **$5.1 billion** in available unused borrowing capacity with the FHLB and Federal Reserve discount window as of September 30, 2024[376](index=376&type=chunk) - Total liquid assets plus unused borrowing capacity equaled **$11.1 billion** (**59%** of total assets), providing substantial coverage for uninsured deposits (approximately **20%** of total deposits)[377](index=377&type=chunk)[378](index=378&type=chunk) Company Capital Ratios | Ratio | September 30, 2024 | Minimum to be Well Capitalized w/ Buffer | | :--- | :--- | :--- | | Total capital (to risk-weighted assets) | 12.2% | 10.5% | | Tier I capital (to risk-weighted assets) | 11.6% | 8.5% | | Common Equity Tier I capital | 8.9% | 7.0% | | Tier I capital (to average assets) | 10.5% | 5.0% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=120&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, managed by ALCO, showing asset sensitivity where a +100 basis point rate increase is projected to raise Net Interest Income by 7.1% over 12 months, with all risk metrics within policy limits - The company is positioned to be asset sensitive, where an increase in short-term interest rates is expected to generate higher net interest income[418](index=418&type=chunk) Net Interest Income (NII) Sensitivity Analysis (Twelve Months Forward) | Rate Change (basis points) | % Change in NII (as of Sep 30, 2024) | % Change in NII (as of Dec 31, 2023) | | :--- | :--- | :--- | | +200 | +14.2% | +11.7% | | +100 | +7.1% | +6.0% | | -100 | -9.9% | -7.5% | | -200 | -19.6% | -15.0% | Economic Value of Equity (EVE) Sensitivity Analysis (Immediate Shock) | Rate Change (basis points) | % Change in EVE (as of Sep 30, 2024) | % Change in EVE (as of Dec 31, 2023) | | :--- | :--- | :--- | | +200 | -0.1% | -4.7% | | +100 | -0.0% | -2.1% | | -100 | +0.2% | +5.5% | | -200 | -0.5% | +10.8% | [Item 4. Controls and Procedures](index=125&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of September 30, 2024, the Company's disclosure controls and procedures were effective[429](index=429&type=chunk) - No material changes were made to the Company's internal control over financial reporting during the third quarter of 2024[430](index=430&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=126&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings during the period - There are no legal proceedings to report[433](index=433&type=chunk) [Item 1A. Risk Factors](index=126&type=section&id=Item%201A.%20Risk%20Factors) No material changes occurred to the risk factors previously disclosed in the 2023 Annual Report on Form 10-K - No material changes from the risk factors disclosed in the 2023 Form 10-K have occurred[434](index=434&type=chunk) [Item 5. Other Information](index=126&type=section&id=Item%205.%20Other%20Information) This section discloses a director and officer adopted a Rule 10b5-1 stock trading plan on August 7, 2024 - On August 7, 2024, Scott A. Evans, a director and officer, adopted a Rule 10b5-1 trading plan to potentially sell up to **25,000** shares of common stock before March 13, 2025[438](index=438&type=chunk) [Item 6. Exhibits](index=127&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and certifications